Employment Law Blog

2012 has been a busy year for employment law so it is perhaps unsurprising that the Government is continuing to announce changes as the year draws to a close.

Back in June, the Government published a consultation on its proposals to change the collective redundancy consultation regime. It has now published its response, announcing a package of reforms which are due to come into force on 6 April 2013.

The reforms are intended to provide employers with greater certainty and flexibility to take necessary steps to restructure, while ensuring employees are engaged in decisions about their future. As the New Year is likely to see a continued rise in large scale restructurings for many employers, the Government's announcement is particularly timely.

The reforms include the following:

• New 45-day minimum period - the Government will remove the 90-day minimum consultation period, which applies where an employer is proposing to dismiss as redundant 100 or more employees. This will be replaced with a 45-day minimum period. The Government believes that this shorter period will allow employers to restructure more quickly and save them administrative and wage costs. It also states that employees will benefit from greater certainty and a less marked impact on morale and productivity. The Government will review the operation and impact of the shorter statutory period on the labour market once it has had time to see its full effect.

• New non-statutory ACAS Guidance - the Government has asked ACAS to prepare new guidance on collective redundancy consultation. This is intended to address the principles and behaviours behind a good quality consultation, with a particular focus on dealing effectively with the most contentious issues, such as providing guidance on "establishment". It will give guidelines but allow enough flexibility for parties to tailor the consultation process appropriately.

• Fixed-term contracts - the Government states that it will legislate to exclude fixed-term contracts which have reached their agreed termination point from collective redundancy consultation obligations, in line with the exemption allowed for in the Fixed-term Workers Directive.

The Government's proposals are controversial and it remains to be seen whether they will provide sufficient flexibility and certainty. The TUC General Secretary, Brendan Barber, has stated today that "The last thing we need is for the government to make it easier to sack people...These measures will not create a single extra job. The idea that an employer will change their mind about taking someone on because the statutory redundancy consultation period has been reduced from 90 to 45 days is close to absurd". The CBI, however, has welcomed the Government's announcement, stating that "the priority for businesses is meaningful consultation. A shorter consultation period will reduce uncertainty for staff and allow businesses to focus on the future more quickly".